Eclipse shallow drilling to extend leases

I have read several posts where folks have been "negotiating" extensions with Eclipse where old leases are fixing to expire over the next 4 to 6 months. Eclipse is stating they will drill a shallow well to hold lease if property owner does not agree to the extension terms (which are terrible). has anyone taken them to the end and actually have them drill a well?

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Permalink Reply by The Hiker on November 10, 2013 at 10:13am

Trekker:   Yep, that's exactly what's going on in my area.  HBP Oxford acreage is being asked to sign an addendum to allow a larger pooling size.

Do you know the case name in the Belmont court you refer to? 

I agree, the landowners should get the same bonus deal that everyone else did.

Permalink Reply by Trekker on November 11, 2013 at 9:40am

Hiker,

The name of the case is OXFORD OIL COMPANY V. BARRY M. WEST, STACEY L. WEST ETC.  Case No 22CV 435, decided Oct 4, 2013 in the Court of Common Pleas for Belmont County.  It should be available on the Belmont County website.

The potential damage to Eclipse (Oxford) from this case is enormous.  It raises the possibility of invalidating thousands of leases.  I am sure that it will be appealed.  But landowners should use it in negotiations with Eclipse in the meantime.

The judge decided that the Oxford lease was invalid on its face because the hbp clause could hold the lease indefinitely as long as Oxford said that there was production, however tiny.

Trekker. 

Permalink Reply by The Hiker on November 11, 2013 at 9:50am

Trekker:  Thanks for the info.  I'll pass it along.

Permalink Reply by Airman on November 8, 2013 at 5:17am

 we are going through this right now ourselves. 156 acres in Guernsey county/millwood township. They wanted to offer 100 an acre but for good faith they will offer 500. Really? Why the good faith? They have not been good with anything so far. Threatened with a drilling soon but nothing so far on the odnr site. Lease ends in March and they say the will drill to keep the me HBP. Attorney swears they are not budging from this. Anyone received anything higher than 500? If so, they will possibly readjust numbers if I can bring the number to them and who. Oh yeah, and because I signed a tentative new lease with another company, this is why they will not offer any better than this. Anyone else in the same boat?

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on November 8, 2013 at 5:28am

"Oh yeah, and because I signed a tentative new lease with another company, this is why they will not offer any better than this."

This is pure BS on their part.  Your top lease has no bearing on their current lease or their offer to amend it.  None.  Until your old lease expires your top lease is purely a fantasy.  They know this but they're trying to pull a fast one on you.  

Permalink Reply by Philip Brutz on November 9, 2013 at 7:07am

156 acres is a one of the larger parcels of land in Millwood, almost twice my acreage.  If I was Eclipse I would put you at the top of my drilling list. 

I agree with Marcus, a top lease has no bearing on your lease with Eclipse.

You have a difficult choice to make, I wish you the best.

Permalink Reply by Airman on November 9, 2013 at 9:03am

Thanks Phil, I've been wrestling with this one for 3 weeks now. My attorney wants us to sit down with Eclipse to discuss this. I think that is why I have an attorney. My negotiating skills are not worth 150.00 an hour. My daughters friend has his own oil company, and he says to get a TRO, but I am not comfortable with that. I just want that which is fair. Been really thinking of selling 50%, and letting the expertise of a mineral partner weave his way around the minefield. Talking with an attorney with Southeast Landowners group to see if she has any ideas. And yes you are right. The ODNR well site shows my property literally swamped between oxford wells. Hard to believe, I finally have the possibility of making something out of my land after 40 years, and now may loose it to these sharks.

Permalink Reply by The Hiker on November 8, 2013 at 10:41am

I heard an (unverified) rumor today that there are people in this situation in northern Noble that have signed an amendment for $5k plus a clause eliminating any deductions.    A rumor until I speak to the party referred to, but I did speak with an Eclipse landman (at a friends house) who verified the no deduction part of the offer.

Permalink Reply by Gusher on November 8, 2013 at 12:03pm
Agree on the rig availability but they sure do come across strong that they will find a way
Permalink Reply by The Hiker on November 9, 2013 at 1:32am

If you call their bluff and they do come in and drill, you're HBP, get no signing bonus, you get 12.5% royalty and most of that will be gobbled up by deductions.   If you call their bluff and they don't drill, you get a handsome signing bonus and 20+% royalty and can possibly negotiate a "gross" lease.  If you cave in and sign the addendum, you get a signing bonus depending on your negotiating skills (?), 12.5% royalty, and a no deduction clause.

Permalink Reply by searcherone on November 9, 2013 at 1:46am

Mr. Hiker, have you seen what they say is a no deduction clause?  Or will it be in a clause located elsewhere in the lease, which is another tactic used in these situations.

  Has anyone signed what is called a "no deduction clause" with Eclipse?  If so let us hear from you.

Permalink Reply by The Hiker on November 9, 2013 at 8:11am

The Eclipse landman told my neighbor he would provide the addendum in a few days.  I'll try and get a copy.  .Ditto your question:   Has anyone else seen or been offered this?

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